Reading Sentiment
Four strategies to trade options flow sentiment with Snapshot. From following the flow to fading extremes, use the ratio to time entries and confirm direction.
1. Follow the Flow
Strategy
When flow ratio hits 3x+ in one direction, trade that direction. Strong flow = strong signal.
Setup
- 3x+ bullish = Buy calls or bull spreads
- 3x+ bearish = Buy puts or bear spreads
Example
Monday morning: $45M bullish flow vs $12M bearish flow = 3.75:1 ratio. Strong bullish conviction. Look for call entries on pullbacks or breakouts.
Execution
- Snapshot shows 3x+ ratio
- Confirm with chart (support, breakout, volume)
- Enter in flow direction
- Stop below key level (bullish) or above (bearish)
Risk
- 3x can reverse. Use stops.
- Don't chase extended moves. Wait for pullback or confirmation.
2. Contrarian Plays
Strategy
When flow hits 5x+ extreme, consider fading. Crowd may be too one-sided.
Setup
- 5x+ bullish = Possible put or short setup
- 5x+ bearish = Possible call or long setup
Execution
- Snapshot shows 5x+ extreme
- Look for exhaustion on chart (reversal pattern, overbought/oversold)
- Enter opposite to flow
- Tight stop - if flow continues, exit fast
Risk
- Extremes can get more extreme. Size small.
- Use only when chart confirms (reversal candle, RSI extreme, etc.).
3. Flow Shifts
Strategy
When sentiment flips from bullish to bearish (or vice versa), trade the new direction. Reversals = momentum trades.
Setup
- Bullish to bearish = Put entries
- Bearish to bullish = Call entries
Execution
- Monitor Snapshot throughout the day
- Notice ratio flip (e.g., was 3:1 bullish, now 2:1 bearish)
- Confirm on chart (break of support, volume surge)
- Enter in new flow direction
Risk
- False reversals happen. Confirm with price action.
- Early entries can get stopped. Wait for clear shift.
4. Ticker-Specific Sentiment
Strategy
Search specific stocks in Snapshot. Use for watchlist prep, earnings plays, or sector focus.
Setup
- Filter by ticker
- Compare flow to sector or market
- Use for entry timing on known setups
Example
You're watching XYZ for a breakout. Snapshot shows 4:1 bullish on XYZ vs 1.5:1 on sector. XYZ has relative strength in flow. Higher conviction on the breakout.
Execution
- Add ticker to filter
- Check ratio vs historical or vs sector
- Use as confirmation for your thesis
- Enter when flow + chart align
Risk
- Single-ticker flow can be noisy. Combine with OptionFlow for trade-level detail.
Monday Morning Example
Scenario: Pre-market, Snapshot shows $45M bullish flow vs $12M bearish flow.
Ratio: 45 / 12 = 3.75:1 bullish
Interpretation: Strong institutional call buying. Market participants are positioned for upside.
Action: Look for long setups. Confirm with chart. Consider calls on pullbacks or breakouts. Avoid aggressive puts unless chart shows clear reversal.
Quick Reference
| Strategy | Ratio | Action |
|---|---|---|
| Follow the Flow | 3x+ | Trade flow direction |
| Contrarian | 5x+ | Fade extreme |
| Flow Shifts | Reversal | Trade new direction |
| Ticker-Specific | Any | Confirm thesis |
Next Steps
- Quick Start - Get started with Snapshot